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74 Cards in this Set
- Front
- Back
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Net Working Capital |
Current Assets - Current Liabilities |
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Current Ration |
Current Assets / Current LIabilities |
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Quick (Acid test) Ratio |
(Cash + Marketable Securities + Net Receivables) / Current Liabilities |
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Cash Ratio |
(Cash + Marketable Securities) / Current Liabilities |
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Cash Flow Ratio |
Cash Flow from Operations / Current Liabilities |
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Net Working Capital Ratio |
(Current Assets - Current Liabilities) / Total Assets |
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Accounts Receivable Turnover |
Net Credit Sales / Average Accounts Receivable |
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Days' Sales Outstanding in Receivables |
Average # of days to pay receivables Days in year / Accounts Receivable Turnover |
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Inventory Turnover |
COGS / Average Inventory Balance |
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Days' Sales in Inventory |
Average # of times Inventory turns per year Days in Year / Inventory Turnover |
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Accounts Payable Turnover |
Purchases / Average Accounts Payable |
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Days' Purchases in Accounts Payable |
Average # of days to settle a payable Days in Year / Accounts Payable Turnover |
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Operating Cycle |
Days' Sales Outstanding in Receivables + Days' Sales in Inventory |
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Cash Cycle |
Operating Cycle - Days' purchases in Accounts Payable |
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Fixed Asset Turnover Ratio |
Net Sales / Average Property, Plant, Equipment (PPE) |
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Total Assets Turnover Ratio |
Net Sales / Average Total Assets |
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Total Capital |
Total Liabilities + Total Equity |
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Total Debt to Total Capital Ratio |
Total Debt / Total Capital (Liabilities + Equity) |
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Debt to Equity Ratio
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Total Debt / Total Equity
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Long-Term Debt to Equity Ratio |
Long-Term Debt / Total Equity |
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Debt to Total Assets |
Total Debt to Total Assets |
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Times Interest Earned Ratio |
EBIT (Earning before interest and taxes) / Interest Expense |
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Earnings to Fixed Charges Ratio |
(EBIT + Interest of Operating Leases) / (Interest Expense + IOL + Dividends on Preferred Stock) |
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Degree of Operating Leverage (Single Period) |
Contribution Margin / Operating Income or EBIT |
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Degree of Operating Leverage % Change |
% Change in Operating income or EBIT / % Change in Sales |
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Degree of Financial Leverage |
EBIT / EBT |
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Degree of Financial Leverage % Change |
% Change in Net Income / % Change in EBIT |
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EBITDA Margin % |
EBITDA / Net Sales |
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Return on Assets |
Net Income / Average Total Assets |
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Return on Equity |
Net Income / Average Total Equity |
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Dupont ROA |
Net Income / Average Total Assets = (Net Income / Net Sales) X (Net Sales / Average Total Assets) or = Net Profit Margin X Total Asset Turnover |
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Dupont ROE |
(Net Income / Net Sales) X (Net Sales / Average Assets) X (Average Total Assets / Average Total Equity) or Net Profit Margin X Asset Turnover X Equity Multiplier |
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Book Value per Share |
(Total Equity - Liquidation of Preferred Equity) / Common Shares Outstanding |
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Market to Book Ratio |
Market Price per Share / Book Value per Share |
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Price to Earning Ratio |
Market Price per Share / Basic Earning per Share |
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Price to EBITDA Ratio |
Market Price per Share / EBITDA per Share |
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Basic Earnings per Share |
IACS (Income Available to Common Shareholders) or Net Income / Average Common Shares Outstanding |
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Earnings Yield |
EPS / Market Price per Share |
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Dividend Payout Ratio |
Dividends to Common Shareholders / IACS or Net Income |
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Dividend Ratio |
Dividend per Share / Market Price per Share |
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Common Size Income Statement |
Income statement presented as % where Net Sales = 100%. Also known as Vertical Income Statement |
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Horizontal Analysis |
One year used as base and set to 100% on each area, then other years (or quarters, months, etc.) compared as + or - % of that base. |
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Rate of Return on Investment |
Amount Received (Sales) - Amount invested |
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Rate of Return % |
Return on Investment / Amount Invested |
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CAPM |
Required Rate of Return Rf + Beta(Rm - Rf) (Rm - Rf) is the risk premium |
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Price to Sales Ratio |
Market Price per Share / Net Sales per Share |
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Debt Cost of Capital |
Effective Interest Rate / (1 - Tax Rate) |
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Preferred Stock Cost of Capital |
Cash Dividend on Preferred Stock / Market Price of Preferred Stock |
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Common Stock Cost of Capital |
Cash Dividend on Stock / Market Price of Common Stock |
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WACC Weighted Average Cost of Capital |
Relative Weight of Class (Debt, Stock) X Component Cost + All Types |
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Economic Order Quantity for Cash |
Q = SQR of ((2bT)/(i)) Q = Optimal Cash Balance b = Fixed Cost per Transaction T = Total demand for cash for period i = interest rate on marketable securities |
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Speed up Cash Collections Savings |
Daily Cash Receipts X Days of reduced float X Opportunity Cost of Funds |
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Impact of Credit Term Change |
Increased investment Receivables Incremental Variable Costs X (Incremental Collection Period / Days in Year) Cost of Change Increased investment in Receivables X Opportunity Cost Benefit or loss Incremental Contribution Margin - Cost of Change |
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Costs Related to Inventory |
Purchase Cost + Carrying Costs + Ordering Costs + Stockout Cost |
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Carrying Cost of Inventory |
Storage Insurance Security Inventory Tax Depreciation or rent of facility Interest Obsolescence and Spoilage Opportunity Cost of funds |
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Reorder Point Equation |
(Average Daily Demand X Lead Time in Days) + Safety Stock |
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EOQ Inventory |
Reorder Amount = SQR of ((2aD) / k) a = Fixed cost per purchase order D = Periodic Demand in Units k = Periodic carrying cost per unit |
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Cost of Carrying Safety Stock |
Expected Stockout Cost + Carrying Cost |
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Cost of Not taking a Discount |
(Discount % / (1 - Discount %)) X (Days in year / (Total payment period - Discount Period)) |
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Assumptions of EOQ |
Demand is Uniform Order and Carry Costs are Constant No Quantity Discounts Allowed Sales are Predictable Deliveries are on Time |
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Simple Interest Loan |
Amount Needed = Invoice Amount X (1 - Discount %) Interest Expense = Amount needed X Stated Rate |
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Effective Interest Rate |
Net Interest Expense / Usable Funds |
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Discounted Loan |
Requires interest paid upfront Total Borrowed = Amount needed / (1 - stated rate) Effective Rate = Stated Rate / (1- Stated Rate) |
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Compensating Balance Loan |
Total Borrowing = Amount Needed / (1 - compensating %) Effective Rate = Stated Rate / (1 - Compensating %) or Net interest Expense / Usable Funds If on discounted Loan = Stated Rate / (1 - Stated Rate - Compensating %) |
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Breakeven Point in Units |
Fixed Costs / Unit Contribution Margin |
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*Contribution Margin Ratio |
Unit Contribution Margin / Unit Selling Price |
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Breakeven in Dollars |
Fixed Costs / Contribution Margin Ratio |
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Margin of Safety and Ratio |
Planned Sales - Breakeven Sales Margin of Safety / Planned Sales |
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Targeting Operating Income |
(Fixed Costs + Target Operating Income) / UCM After Tax Variant (Fixed Costs + (Target Net Income / (1 - Tax Rate)) / UCM |
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Price Elasticity |
(|Q1 - Q2| / |Q1 + Q2|) / (|P1 - P2| / |P1 + P2|) |
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Book Rate of Return |
GAAP net income from investment / Book value of investment |
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Cash Flow Discounting |
[Cash Flow0 / (1+r)0] + [Cash Flow1 / (1+r)1]+ etc. |
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Payback Period |
Initial net investment / Annual expected cash flow |
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Profitability Index |
PV of future cash flows / Net investment |
